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Press Review August 2013: First Impressions

This press review features the latest publications by UNU-MERIT and its School of Governance, from working papers to policy reports to books, as well as mentions in the media.

Our output for August includes a book, a book chapter, a policy brief, two journal articles, five working papers, and a research report for the World Bank. We cover skills and technology in India, R&D in China, migration in Moldova, welfare in Kyrgyzstan, diaspora development in Mexico and Argentina, and employment safety nets in Chile, among several other topics. Professor Fred Gault also features in University World News.

Our ‘International Policy Debate on Remittances, Entrepreneurship and Development‘ produced a policy brief which argues that migrant entrepreneurs are increasingly considered a development potential for migrant-sending countries. While living abroad migrants often increase their educational level and/or gain new skills, earn more money, have better access to credits and extend their social networks. Migrant entrepreneurs are therefore considered to be in a good position to run successful businesses based on their knowledge of both their home and host countries. Consequently, the promotion of entrepreneurship among qualified migrants and their transnational households in migrant-sending countries and the facilitation of money transfers – also known as remittances – to finance businesses has become a part of economic policy in many developing countries. By PhD fellows Sonja Fransen and Katrin Marchand, and assistant researcher Levi Vonk.

‘The impact of migration on children left behind in Moldova‘ empirically evaluates the well-being of children left behind by migrant household members in Moldova. The working paper uses data from a nationally-representative, large-scale survey carried out among more than 3000 households across Moldova. The authors found that migration is not linked to negative outcomes on children’s well-being in any of the dimensions analysed, nor does it matter who in the household has migrated. Children living in return migrant households, however, attain higher rates of well-being in specific dimensions like emotional health and material well-being. This paper is the first (to the authors’ knowledge) to link migration and multidimensional child poverty. By Senior Researcher Franziska Gassmann, Assistant Professor Melissa Siegel, and PhD fellows Michaella Vanore and Jennifer Waidler.

The chapter ‘Mexico and Argentina: Diaspora Search Networks Interacting with Home Countries—Contrasts and Similarities’ features in the book entitled ‘How Can Talent Abroad Induce Development at Home? Towards a Pragmatic Diaspora Agenda’. The chapter appears inpart three of the book, which considers expatriate talent and transformation of innovation systems at home, also focusing on Russia and South Korea. By PhD fellow Ezequiel Tacsir.

‘Learning, Capacity Building and Innovation for Development‘ argues that capability building is an active, not a passive, process and requires a purposeful effort from learners, with support and commitment on allocation of time and resources toward learning activities. In this book, a global cast of academics and policymakers examines economic development as a process of learning and technological accumulation, showing how economic development is a process involving creative destruction. The authors contend that while markets and competition play major roles in structuring the development process, non-market institutions and government policies matter. Edited by Professors Luc Soete, Dick Nelson, et al.

‘The growth of outward FDI and the competitiveness of the underlying economy: the case of India’ argues that there has been an impressive spurt in the outward FDI activity of Indian MNEs since the 1990s. However, despite the rhetoric, this growth has not been exceptional compared to other similarly developed countries, states this working paper. The evidence suggests that the strengths and weaknesses in the location assets of India have caused pockets of excellence to emerge, but that these conditions do not lend themselves to a broader growth in competitiveness, meaning that further rapid growth is ultimately not sustainable. Systematic upgrading and radical policy changes are needed to build up India’s knowledge infrastructure and institutions to support a shift in India’s competitive advantages to new sectors outside these pockets. This ultimately means a policy emphasis on the manufacturing sector, and within that, promoting a shift from low-tech to higher technology, and a strengthening of the formal sector. By Professor Rajneesh Narulaet al.

‘Complementarity between In-house R&D and Technology Purchasing: Evidence from Chinese Manufacturing Firms’ states that firms in developing countries acquire technological advancement through internal R&D and external technology-sourcing. This journal article tests whether these two sources of technology acquisition are complements or substitutes for each other in small- and medium-sized Chinese manufacturing firms. The authors present evidence that shows some signs of complementarity between the two sources of knowledge in reaching a higher unconditional intensity of product innovation for firms with 100–300 employees and, in general, a significant degree of substitutability between them in achieving higher levels of labour productivity. By Professor Pierre Mohnen and PhD fellow Jun Hou.

‘Technology alliances in emerging economies: persistence and interrelation in European firms’ alliance formation’ looks at European firms’ alliance strategies and examines the patterns and the determinants of technology alliance formation with partner firms from emerging economies. The authors find that both prior collaborative experience (persistence) and prior engagement in international alliances with partners from developed countries (interrelation) contribute to new alliance formations. The article, published in R&D Management, suggests that by building on their prior international alliance experience, firms extend their alliance portfolios across both developed and emerging economies, increasing the geographical diversity of their alliance portfolios. By Professor René Belderbos, researcher Jojo Jacobet al.

‘Regional welfare disparities in the Kyrgyz Republic’ aims to analyse the reasons behind regional welfare disparities in the Kyrgyz Republic. It is the first empirical paper aimed at explaining regional welfare disparities in a country from the Central Asian region where the urban rural gap is an important component of inequality. By quantifying and separating the gap in welfare disparities in 2011 between observable characteristics of households and differences in marginal returns to these characteristics (potentially related to geographic factors), the paper considers whether regional disparities in welfare are related to concentration of people with unfavourable characteristics or higher returns to them and higher productivity in particular areas. Its findings reveal a complex picture with regards to the determinants of welfare within and between regions of the Kyrgyz Republic. By affiliated researcher Aziz Atamanov.

‘How unemployment insurance savings accounts affect employment duration: Evidence from Chile’ is the first empirical investigation into the effect of the introduction of unemployment insurance savings accounts (UISA) in Chile in October 2002 on employment duration. The working paper finds that workers participating in the scheme show an increased hazard ratio of leaving employment, or accelerated time to employment termination. The results provide strong support that the introduction of UISA led to shorter employment duration and higher mobility of the workforce in Chile. The author concludes that UISA can present an alternative for emerging economies that seek to stimulate a more dynamic labour market, while avoiding some problems related to unemployment insurance. By PhD fellow Paula Nagler.

‘Designing an optimal ‘tech fix’ path to global climate stability: Directed R&D and embodied technical change in a multi-phase framework’ is an extensively revised version of UNU-MERIT Working Paper 2013-009. The latter paper has been cited in other work and therefore continues to be accessible, although superceded by the present version. By Professor Paul A. David and Dr Adriaan van Zon.

‘Self-organization of knowledge economies’ asks us to suppose that homogenous agents fully consume their time to invent new ideas and learn ideas from their friends. If the social network is complete and agents pick friends and ideas of friends uniformly at random, the distribution of ideas’ popularity is an extension of the Yule-Simon distribution, argues this working paper. By PhD fellow François Lafond.